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G V Prasad, chairman, Dr Reddy’s Laboratories, does not agree with those who say Indian pharma companies are being targeted by regulators in the US or the UK. On the contrary, in an interview with Manu Balachandran, during the recently concluded Strategic Management Society Conference in Mohali, he says there are very few Indian companies on the regulators’ warning lists. Edited excerpts:
Pharma research & development (R&D) in the country has always been a matter of concern. How can we address this issue?
R&D budgets in India today range between five and eight per cent and very few companies’ budgets are in double digits. But even with little money we have been able to do a lot of great work over the years. Also, there are some constraints in terms of talent and we also suffer from policy inaction. There are price control limits today and clinical trials are a essential towards R&D. We are not able to do clinical trials as a result of misguided activists who believe people are being made guinea pigs. As far as product innovation is concerned, we are still at the primary level.
The recent decision on Novartis is seen as a major victory for Indian pharma.
In the past years, there has been no product from India that has made a significant change to the world. We tweak and improvise products but there is little to celebrate. Without an innovator, there is no generic pharma product and at the current level of innovation, we have nothing to be extremely proud of.
There is a view that Indian companies are being targeted by the US and UK drug regulators?
I don’t think there is anything special. Regulators are doing their job and as the Indian industry grew in volume and size, we made some mistakes in the process. We are getting caught now. There is nothing specific about Indian pharma or specifically against Indian companies. If you see, the percentage of Indian companies among the total number of warning letters issued by FDA (Food and Drug Administration in the US), then we are not that bad. But it is a concern and we have to organise ourselves.
The lack of a whistleblower policy has cost Ranbaxy. Are we likely to see Indian companies increasing work on such a policy? Also, are you seeing some changes in pricing?
At Dr Reddy’s, we have always had an ombudsman. This reward system has always been there in the system and will force the companies to behave properly. As far as pricing go, there is some movement in pricing now. They have moved from away from cost based to competition based and there is some improvement, but price control is not very positive for the industry.
How are you addressing the lack of talent?
Cutting-edge innovation always comes from academia, such as in the case of Google. Google was born in a university. So, we are hoping the quality of students improves in coming years. We currently hire the maximum number of PhDs in India but we do not have deep skills in India today. A lot of times, such as with drug discovery, we reach a particular point and then back out because of various reasons. We are investing lot of money into our proprietary business now and we will see innovation improving.
